What is the kryptonite for disruptors?

Established businesses everywhere are under attack. The headlines are full of stories of business disruption. Entrepreneurs everywhere are building companies to unseat the entrenched firms.

While many think the answer is to invest in more technology, lobby government or follow their competitors actually the answer is right in front of them.

Our team in Sydney recently had the chance to sit down with Luke Jecks, the Global CEO of Naked Wines for his perspective. Listen to Luke talk about what he describes as the Kryptonite for disruptors, its a great lesson for anyone in business today:

So what’s the Kryptonite for disruptors? A Customer Culture or as Luke puts it:

“Love your customers”

If you spend time understanding and acting on your customers needs you will create loyalty that will keep you as immune as you can be to disruption.

So how did Naked Wines disrupt the wine industry?

Before Luke setup Naked Wines four years ago he was looking for an industry where customers felt disenfranchised. He found it in the Australian wine industry – a market dominated by two large retail chains owned by Coles and Woolworths that between them shared almost 70% of wine sales nationally. Not only did he find wine lovers who felt little connection with the vast array of brands but also boutique vineyards that were being squeezed out of the market by ever narrowing margins and an inability to finance the next vintage.

Luke knew that if he could create a personal connection between wine growers and consumers and a financial model that could provide more stability and certainty for wine growers he could build a new business.

He realized that he needed wine consumers as repeat customers and he came up with the idea of “angels’ – that is consumers as angel investors who would pay $40 per month and build up a credit in their account to be used to buy the boutique wines of their choice.

Four years after launch Naked Wines in Australia has more than 50,000 sustained angels, more than 35 boutique winery suppliers with an online communication and ordering system that connects them.

Annual Australian revenue of $30 million and more than $200 million globally is testament to the fact that the whole Naked Wines team have a culture that enables them to “love” their customers.

Isn’t it time to create a customerculture in your business and build up your disruptor defenses?

If you are interested in creating this type of culture in your organization why not attend one of our MRI Accreditation Workshops held all around the world!

 

How customer insight uncovers growth opportunities – Lessons from Nestle Japan

cappucino

Nestle’s customer insight creates a new market in Japan

Traditionally Nescafe was bought in grocery stores and consumed at home. As Nestle Japan searched for new ways to expand its coffee business it found that the economic downturn led to Japanese companies ceasing to supply coffee on the job for their employees. There are about 6 million offices in Japan, most having less than 20 workers and few coffee suppliers were selling directly to offices.

Nestle Japan developed the concept of the Nescafe Ambassador – an office employee with a passion for coffee, interested in collaborating directly with Nestle on behalf of their workplace and acting as an “in-office barista”. The company supplied an in-office Nescafe Barista soluble coffee machine and the Ambassadors ordered the coffee from Nestle, collected money from their co-workers for coffee consumed and forwarded payment.

This innovation came from the insight that Japanese employees liked to have the convenience of having coffee in the workplace. But more than that it was an opportunity to talk with their colleagues, collaborate and catch up with what is going on – it rebuilt their social interaction and a sense of community at work which had been lost in many office environments. Nestle was able to capitalize on this unique understanding of what was happening in the Japanese office environments

Nestle is also looking for new ways to meet the needs of Ambassadors to enhance the atmosphere at their workplaces and facilitate communication between their colleagues.

customer insight

This new business model based on a customer-centric approach to business has been very successful for Nestle japan. The program was rolled out in November 2012 and by early 2015 there were 170,000 Nescafe Ambassadors. Their goal is to establish 500,000 Nescafe Ambassador cafes at the workplace as well as 6,000Nescafe Satellite cafes and Café-in-shops over the next five years.

Source: Kotler Impact, “Mind your Marketing”, Volume 1, October 2015, Business Model Innovation: The Nescafe Ambassador Program, pages 120-121

How one person can make a difference role modeling customer centricity

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Tarpy’s Roadhouse just outside of Monterey, California is renowned for its good food, friendly hospitality and fast service. One person, Niranjan (“Nick”) Subedi, a native of Nepal, shines out as a role model in serving guests at the restaurant since 2000. A phrase known to every Nepali translates to “guests equal god” and offering all you have to a guest is considered a moral duty. Nick remembers every guest and their preferences even when they have not been back to Tarpy’s in a long time. Clint Eastwood, who lives in the area, is a big fan and he like many guests requests to be seated in the area where “Nick” is serving. Nick’s belief is that service is a duty and a pleasure and he shows this in his wide grin and attention to customers’ needs. But more than that he says: “I try to bring the human element to dining, to show that I love the guests”. He lives nearby with his wife in a house he owns “ because of my customers. I owe everything to them,” he said.

“Guests equal god”

It only takes one person like “Nick” Subedi to act as a powerful role model in a business reflecting strong customer-centric behaviors to lead others to do the same. If enough people in your organization follow this example you will have a strong customer culture – and a sustainable thriving business.

Why People Empowerment is Essential to Delivering Memorable Customer Experiences

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Uber, a 5 year-old company recently valued at more than $60 billion, has smashed the taxi networks’ monopoly in many countries. Traditional taxi drivers were expected to follow rule-book procedures with little thought of passengers’ problems and experiences. Uber drivers have a mandate to satisfy and delight customers and they are empowered to do so. High customer satisfaction rates get drivers more jobs showing a direct connection between customer experience and success for Uber and for their drivers.

Costco employees are empowered to take back products purchased by their customers – no questions asked. This saves any potential embarrassment for customers and employees alike. Costco members are loyal and enjoy their experience more because they know if they make a poor purchasing decision, they can return the goods without any hassles.

UK retail giant Waitrose won an award at the UK Customer Experience Awards last year with an initiative called “Licence to Thrill”. This empowered customer service employees to go beyond the rules resulting in improved customer satisfaction rates and sales.

For employees to be effectively empowered they need to have the freedom and desire to act for the customer, the skill to implement the desired solution for the customer and the confidence to carry it through. In organizations that do not have a customer-centric culture this is very difficult for people to do. They will be restricted by a rule-book of business-centered processes, will have reduced motivation to act outside the “book” and will lack confidence – believing their decisions to help the customer will not be supported by their managers.

A strong customer culture embraces employee empowerment to satisfy customers resulting in memorable customer experiences, brand loyalty, increased customer retention and advocacy – and sustainable revenue and profit growth.

Read more about it in The Customer Culture Imperative.

Who is the world’s best performing team?

All_Blacks_Haka

When All Blacks coach, Graham Henry (later knighted for his services to rugby), took over as coach in 2004 he realized there was a need to change the culture of the organization – the players, coaching staff and administration. They needed to build in collaboration, resilience, innovation and good decision-making under pressure on and off the field. After a review, Henry and his wider team came to the view that “better people make better All Blacks”. He put together a team of support staff whose role was to help all the players not only with their fitness, diet, training and skills, but more importantly to build their character and attitudes as people leaders and understand their commitment to the team and to their fans in New Zealand and around the world.

Henry set about building a collaborative leadership team composed of the senior players and senior staff. These on-field and off-field teams knew their roles and responsibilities and worked as a total team to build a winning culture designed to continue the legacy of the great All Blacks teams of the past.

When the New Zealand All Blacks lost to the French in the quarter final of the Rugby World Cup in 2007 it was a shock to the players, coaches and 4 million New Zealanders – the entire population of the country. Henry realized there was more to do so he hired two outside consultants, one a psychologist, and both Black Belt karate experts, to develop a mental skills program to raise the ability of players to handle pressure on the rugby field. They educated the players on how the brain works and each player had triggers to help keep focused when under pressure and when unexpected things happened in the game. This added to their resilience as players and enabled them to handle extreme pressure in tight games and when things were turning against them.

“Better people make better All Blacks”

This program of development has continued and with consistency of players and coaching staff over time has created a consistent world beating team.

The All Blacks won the 2011 and 2015 Rugby World Cups and with a winning rate of higher than 90% over the last 10 years are regarded by many as the best performing team globally in any sport.

Questions to ponder in your business:

How well do your “on-field customer facing teams” and “off-field support teams” collaborate for the benefit of customers and the community?

How well do you support your leaders as “whole” people, not just in terms of skills, but also in terms of their attitudes and alignment of their personal values and priorities with your business’s mission and vision?

Focus on collaboratively creating and delivering superior value for customers is a galvanizing goal for all people in your business – when embedded as a culture it brings out the best in your people that benefits them, your customers and your business performance.

You can learn more in our best selling book, The Customer Culture Imperative.

5 ways the insurance industry is being disrupted

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The insurance industry is facing a shake-up. The traditional model using specialist agents who communicate with their customers around the time insurance premiums are to be renewed and offer generalist solutions is being disrupted.

  1. Consumer needs and demands are changing. Independent online research sources enable consumers to buy online, compare alternative offers and enhance self-service choices. Insurers will need to offer more personalized products that take account of individual circumstances and provide more transparency in their pricing.
  2. Sites such as Friendsurance enable friends to pool their premiums and is an example of how social networks are bypassing traditional insurance companies. As these grow they will impact incumbents.
  3. Car manufacturers are looking to add value to their offerings and through technology will have the ability to offer tailored insurance based on a driver’s history rather than industry wide statistics. Just as they bundle in car servicing they have the ability to bundle in insurance as an overall car package.
  4. As more car sharing takes place and the number of low frequency drivers increases premiums can be restructured to cover “pay as you use”.
  5. Many new competitors will be pure play online companies as we now see with specialized travel insurance companies like 1Cover. There will be many specialized market niches for them to attack.

Incumbent insurance companies will need to build a cultural capability around customer and competitor foresight – a capability that is attuned to future customer needs and future competitive threats. This will require a cultural agility that enables them to innovate and act before customer changes and new competitor models break the floodgates and seriously erode their businesses and their future.

Is your company being disrupted or a disruptor?

You can read more about what you must do to build customer and competitor foresight in The Customer Culture Imperative.

Are you making life easier or harder for your customers?

A_frustrated_customer

The credit department of most organizations is quick to ask customers to pay their accounts – particularly if they are overdue. If you get a call from a certain cable company in the US and are asked to pay your account, it should be easy to do so – but it is not! The options you are given as a customer by the caller are:

  • you find your invoice and pay it
  • you go to a shop and pay it or
  • you go online and pay it

Each of these 3 options require you to do something – taking extra time you don’t have. The person calling you on the phone is not able to either send you another invoice (since you can’t find the original one) or take your payment by credit card. Their reminder call has already taken up your time and you are obliged to spend more time.

A simple change in process would add value for you as a customer. The current process reduces the value of your relationship with the company.

If customer relationships are important to your business find out if your finance department adds or reduces value for your customers. It may be inaccurate or confusing bills for the customer, difficulty in paying bills online or in person, unhelpful customer service people or confusing terms and conditions relating to payment. If it reduces value then you are at risk of losing customers through their frustration and dissatisfaction.

Being customer-centric is just as important for the finance department as it is for the marketing, sales and customer service groups. They need to have a view that they are not only collecting money, but they are in the business of retaining satisfied customers.

Without a strong customer culture, this behavior will continue, unquestioned as its just the way we do things around here

Don’t let this be the case in your company!